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Quebec business owners say Groupon owes them cash as its northern presence fades

Some small business owners in Quebec say Groupon Inc. has left them in the lurch amid signs the company is scaling back its operations in the province.

Christopher Reynolds, The Canadian PressJune 7, 2019

Employees at Groupon pose in silhouette with the company logo in the lobby of the online coupon company's offices in Chicago, Sept. 22, 2011. Some small business owners in Quebec say Groupon Inc. owes them thousands of dollars after signs the company is scaling back from the province. THE CANADIAN PRESS/AP-Charles Rex Arbogast

MONTREAL — Some small business owners in Quebec say Groupon Inc. has left them in the lurch amid signs the company is scaling back its operations in the province.

Eloise Lafreniere, who owns the Davelo Beauty Institute in the Montreal suburb of Carignan, says the daily deals company owes her $11,500 after her salon launched a promotional campaign for facials and other treatments with Groupon in February.

She hasn’t received a cent since, with calls going unreturned and email replies coming late, she said.

“They would always delay us by a week, saying, ‘Oh, you’ll receive the payment next week,'” said Lafreniere. “We started to become worried.”

She got in touch with a lawyer and is now considering a class action lawsuit. “We are not the only ones not to have been paid. There are multiple businesses in our situation,” she said.

Jean-Benoit Daigneault, who runs the Heli-Tremblant helicopter tour company, said Groupon owes him nearly $2,000. He said he’s been forced to reject passengers’ coupons as a result.

“It’s not a big amount. But it’s a question of customer relations, and that’s not good,” he said. “I’m not even able to contact them to say, ‘Stop selling it.'”

“I tried to contact my sales representative; the phone number was shut down. Their general inquiry number was shut down. And the only way you can contact them is send them an email, but there’s nobody who replies,” said Daigneault.

Groupon, which shuttered its Montreal sales office in March, said it issued payments Thursday following a story in La Presse, but the business owners say they have yet to receive a cheque.

The company said the delayed payments “were broadly merchant communication/education issues and were not in any way related to external factors — competitive or otherwise.”

“Groupon will of course pay all Quebec merchants for Groupons that they’ve successfully redeemed — and continue to redeem,” spokesman Nicholas Halliwell wrote in an email.

“While Groupon no longer staffs a discrete sales office in Montreal, customers in Quebec can continue to purchase local deals, products and travel.”

The rest of the 11-year-old company’s Canadian markets have “long been served” out of its U.S. headquarters, he added.

Some confusion has nonetheless set in.

Quebec’s Consumer Protection Office received a complaint on May 15 about the company and a spa that would not redeem a coupon purchased from Groupon. The complaint “appears to have been linked to the news of a possible end of Groupon’s activities in Quebec,” said office spokesman Charles Tanguay in an email.

The business model works like this: Customers pay Groupon for a discount deal with a retailer; when the customer uses the coupon, Groupon passes that cash on to the retailer, minus a commission — typically between 20 per cent and 25 per cent of the purchase price.

Once a giant of the online discount marketplace, the Chicago-based company has seen its share price — which breached $26 after its initial public offering in 2011 — dwindle to below $5 for much of the past four years.

Revenues have fallen nearly 13 per cent over the past three years to $2.64 billion in 2018, and the company has lost money eight of the past 10 years.

For Francois Thiviarge, owner of Aventurex rock-climbing gym in Quebec City, the relationship has been smooth for three years.

“We haven’t had any problems yet,” he said, touting a Groupon discount for an ice-climbing package and an “indoor ninja program.”